Talking to your college student about credit cards and debt

About 80 percent of college students have at least one credit card, and their average balance is between $2,000 and $3,000. Many students carry the maximum balance on their cards and make only the minimum payments. Then they graduate with large debts and bad credit histories.

Using a credit card can seem like getting something for free. It is an altered reality that seduces many young people into a state of denial about being accountable for their spending. You can help your college student avoid the credit card trap by having a frank discussion with them. Following are some talking points:

You are going to be receiving enticing credit card offers everywhere you turn: in the mail, stuffed into the shopping bag with your books at the campus bookstore, and even from vendors at the beach on spring break who are handing out free stuff along with card offers. Here are some things you should think about:

* Bad credit stays on your record for seven years in most cases, even if you later pay the bill in full. It can keep you from renting an apartment or getting a loan for a car or home.

* Many employers check job applicants' credit histories as part of the hiring process because they know that people with bad credit often present additional risks.

* An employee with bad credit may not be able to use a credit card to travel on business, and may have to explain this to their employer.

* Debts and bad credit follow you into marriage, and can affect your spouse's ability to get credit.

If you decide you must have a credit card, here are some things you should do:

* Shop around. Beware of high interest rates that companies often charge students, and avoid variable rate cards.

* Find out how much the late payment fee is, and the deadline in order to avoid that fee.

* Always know your up-to-the-moment balance, so it doesn't catch you by surprise.

* Pay your balance in full each month to keep it from getting out of control and to avoid finance charges. This means you should not charge any more than you are able to pay each month.